February 24, 2011

 

South Korea's feed grain imports to drop amid mass animal culls 

 

 

South Korea's mass slaughter of cows, pigs and chicken to contain the worst FMD outbreak and combat avian flu will cut feed grain imports, mainly corn and wheat, by at least 1.3 million tonnes this year, a local official said.

 

Weakening feed demand along with record high grain prices are likely to subdue buying activities of South Korean feed makers for a while unless the livestock outbreaks wane or global prices drop sharply, Kim Chi-young, director at the Korea Feed Association (KFA) purchasing division, said Wednesday (Feb 23).

 

As part of efforts to curb inflation and ensure supplies, South Korea, the world's No.4 grain importer, is looking to build a strategic grain reserve and plans to buy cargoes of corn and another staples, joining similar efforts by other Asian nations worried about high food prices and social unrest.

 

But the KFA's Kim said compound feed demand was seen dropping by at least 14% from last year's 17.5 million tonnes due to the recent livestock cull, resulting in a sharp drop in feed grain imports.

 

"While our members need to buy grain for June and July arrivals, we are taking a wait-and-see stance due to lower feed demand on top of bullish prices," Kim said.

 

Spiralling food prices, which have leapt to two-year highs, have spooked Asian governments, which fear a repeat of widespread unrest in 2008 when fears of grain shortages sent prices soaring and unleashed panic buying.

 

Prices of US corn, soy and wheat have soared since last year because of bad weather damaging crops and rising demand from China and India. This has created problems for South Korea, the world's third-largest corn buyer.

 

Nationwide cases of FMD have forced Asia's fourth-largest economy to cull nearly a third of its hog population and about 5% of cattle to stop the spread of the disease among livestock, with confirmed cases continuing to rise to 149 cases in 10 provinces within three months.

 

Deadly H5N1 virus, or avian influenza, also hit the Northeast Asian country since late December, with 44 cases confirmed in five provinces and about 4% of the country's poultry population culled so far.

 

No human case has yet been detected.

 

"Foot-and-mouth and avian flu are still going on, which makes us hard to pin down how they would affect (feed demand) eventually," Kim said.

 

South Korea culled 5.5 million herd of poultry, 3.2 million pigs, and more than 150,000 cattle, according to the government's data on Wednesday.

 

South Korea's largest feedmaker Nonghyup Feed said earlier this month that the country's feed output was projected to drop by a maximum 30% this year as more livestock would be slaughtered for meat if bans on their transfer were lifted, on top of the massive cull against FMD.

 

Industry officials noted South Korea's feed output was almost equivalent to its feed demand.

 

North Korea earlier this month also has confirmed cases of FMD across the country and lodged the outbreak with the UN food agency, adding more than 10,000 head of draught oxen, milch cows and pigs had been infected and thousands had died.